Dual Eligibles, Chronic Conditions, and Functional Impairment

1. Dual Eligibles, Chronic Conditions, and Functional Impairment DataBrief Series ● October 2011 ● No. 21 In 2006, 37% of seniors eligible for both Medicare and Medicaid had functional impairment in addition to chronic conditions, compared to only 9% of seniors eligible for Medicare-only?

2. Duals with Chronic Conditions and Functional Impairment 1 The Medicare Payment Advisory Committee (MedPAC). A Data Book: Healthcare Spending and the Medicare Program. June 10, 2010. Accessed on June 27, 2011 at: http://www.medpac.gov/documents/jun10databookentirereport.pdf. 2 Avalere Health, LLC. Analysis of the 2006 Medicare Current Beneficiary Survey, Cost and Use file. Excludes beneficiaries who died during the year. 3 The SCAN Foundation. DataBrief No. 1: Characteristics of Dual Eligibles. 2010. Accessed on June 27, 2011 at: http://www.thescanfoundation.org/foundation-publications/databrief-no-1-characteristics-dual-eligibles. Dual eligibles are low-income individuals who are eligible for both the Medicare and Medicaid programs. They are often in poor health and are among the most costly patients to both programs.1 In 2006, Medicare spent $13,197 per capita on duals age 65 and older. In comparison, Medicare spent $6,204 per capita on Medicare-only beneficiaries age 65 and older.2 Dual eligibles age 65 and older have higher rates of chronic conditions than their Medicare-only counterparts. Specifically, they have higher rates of diabetes; stroke; chronic obstructive pulmonary disease; and dementia and related diseases, including Alzheimer’s disease.3 In addition, older dual eligibles have higher rates of both chronic conditions and functional impairment than their Medicare-only counterparts.2 • 37% of duals age 65 or older have both chronic conditions and functional impairment, versus 9% of Medicare-only beneficiaries age 65 or older. • Even though duals make up only 14% of the Medicare population age 65 or older, they represent 40% of all Medicare beneficiaries age 65 or older who have functional impairment and chronic conditions.

3. Dual Eligibles Have Higher Rates of Both Chronic Conditions and Functional Impairment than Medicare-only Beneficiaries Medicare Beneficiaries Age 65 and Over by Dual Eligible Status and Presence of at least 1 Chronic Condition and Functional Impairment, 20061 1 N = 3,800,892 dual eligibles and 23,913,710 Medicare-only beneficiaries. Excludes beneficiaries who died during the year. DataBrief (2011) ● No. 21

4. A Clear Policy Connection Seniors with multiple chronic conditions often have complex health care needs that can lead to high health service utilization. A subset of this group also has functional impairment and requires long-term services and supports (LTSS) in addition to acute care services. Dual eligibles account for a disproportionate share of these beneficiaries. Many duals rely on Medicare to cover their acute care needs and Medicaid to cover their LTSS needs. However, the fragmentation between the acute care and LTSS systems as well as the differing regulatory and financing structures within Medicare and Medicaid have lead to poorly managed and inefficient care delivery for this group. Though there are challenges in integrating these systems, experts agree that doing so has the greatest potential to improve access to care for duals, reduce the duplication of services provided, and reduce costs.1 In April 2011, the Center for Medicare and Medicaid Innovation in coordination with the Medicare-Medicaid Coordination Office awarded contracts to 15 states to design programs that would fully integrate primary, acute care, behavioral health services, and LTSS for dual eligibles. Preliminary proposals by these states include the establishment of accountable care organizations (ACOs) to target high-cost duals, contracting with managed care organizations to deliver integrated services and the state assuming administrative responsibility for both Medicare and Medicaid benefits. Selected proposals will be implemented beginning in 2012.2 • This analysis is based on the 2006 Medicare Current Beneficiary Survey (MCBS) Cost and Use file, an annual, longitudinal survey of a representative sample of all Medicare enrollees. The MCBS collects information on dual eligibility status, functional impairment, health services utilization, and health spending. • In this analysis, individuals who either self-reported that they had Medicaid coverage or who were identified by the Centers for Medicare and Medicaid Services as having Medicaid coverage were considered to be dual eligibles. Individuals who indicated that they received help or standby assistance with one or more Activities of Daily Living (ADLs) and/or three or more Instrumental Activities of Daily Living (IADLs) were considered to have functional impairment. • Individuals who indicated that they had ever been diagnosed with any of the following conditions, were considered to have chronic conditions: arthritis, Alzheimer’s Disease, broken hip, cancer (excluding skin), congestive heart failure, depression, diabetes, hypertension, mental illnesses (excluding depression), myocardial infarction and other heart conditions, osteoporosis, Parkinson’s Disease, pulmonary diseases such as emphysema, asthma and Chronic Obstructive Pulmonary Disease, and stroke. • This analysis is limited to individuals age 65 or older who were enrolled in the fee-for-service, or traditional, Medicare program. It excludes beneficiaries who had any Medicare Advantage spending and any beneficiaries who died during 2006. 1 Center for Health Care Strategies. Profiles of State Innovation: Roadmap for Improving Systems of Care for Dual Eligibles. 2010. Accessed on September 28, 2011 at: http://www.chcs.org/usr_doc/Duals_Roadmap_112210.pdf. 2 Kaiser Family Foundation. Proposed Models to Integrate Medicare and Medicaid Benefits for Dual Eligibles: A Look at the 15 State Design Contracts Funded by CMS. 2011. Accessed on September 28, 2011 at: http://www.kff.org/medicaid/upload/8215.pdf. DataBrief (2011) ● No. 21